As you might know, Establishment Labs Holdings Inc. (NASDAQ:ESTA) recently reported its third-quarter numbers. Revenue hit US$40m in line with forecasts, although the company reported a statutory loss per share of US$0.59 that was somewhat smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Establishment Labs Holdings from six analysts is for revenues of US$206.4m in 2025. If met, it would imply a substantial 35% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 31% to US$1.75. Before this earnings announcement, the analysts had been modelling revenues of US$232.9m and losses of US$1.32 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target was broadly unchanged at US$61.33, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Establishment Labs Holdings at US$75.00 per share, while the most bearish prices it at US$46.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Establishment Labs Holdings' growth to accelerate, with the forecast 27% annualised growth to the end of 2025 ranking favourably alongside historical growth of 16% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Establishment Labs Holdings is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Establishment Labs Holdings. They also downgraded Establishment Labs Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at US$61.33, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Establishment Labs Holdings going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Establishment Labs Holdings that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
